Two More People Charged in Connection with Multi-State Scheme to Defraud Financial Institutions of Millions of Dollars
TRENTON, N.J (STL.News) Two men were arrested today for their alleged roles in a scheme to defraud multiple financial institutions of millions of dollars, Acting Attorney Rachael A. Honig announced.
Syed Abbas, 32, of Westerville, Ohio, and Muhammad Naveed, 35, of Jersey City, New Jersey, were arrested by federal law enforcement this morning and are each charged by criminal complaint with conspiracy to commit bank fraud. Naveed is scheduled to appear later today by videoconference before U.S. Magistrate Judge Lois H. Goodman. Abbas is scheduled to appear today in Ohio federal court and have his initial appearance by videoconference before Judge Goodman on Feb. 8, 2021.
The defendants are the eighth and ninth defendants charged in the same criminal complaint in the District of New Jersey in connection with the wide-ranging conspiracy to defraud federally insured banks and merchant processors of millions of dollars. In July 2020, seven other defendants were charged in connection with the scheme.
According to documents filed in the case and statements made in court:
From March 2018 through April 2020, Abbas and Naveed conspired with each other and others to defraud several financial institutions. Abbas and Naveed and their conspirators established bank accounts associated with sham entities that had no legitimate purpose, and thereafter issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. Abbas and Naveed also conducted numerous fraudulent credit card and debit card transactions between shell companies to fraudulently credit payee accounts and fraudulently overdraw payor accounts. Abbas and Naveed would use these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization.
Abbas and Naveed withdrew the “existing” funds (through ATMs or bank tellers) that banks had credited to the payee bank accounts at the time of the fraudulent transactions. Because Abbas and Naveed withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks were left with substantial losses.
Law enforcement identified approximately 200 bank accounts used to facilitate the fraudulent schemes. Abbas, Naveed, and other conspirators’ unlawful activities attempted to cause a $10 million loss on financial institutions. The loss attributable to Abbas and Naveed exceeded $1 million.
The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.
Acting U.S. Attorney Honig credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, Newark Division; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; special agents of the Social Security Administration, under the direction of John F. Grasso; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the Department of Homeland Security, Homeland Security Investigations – Ohio Division, with the investigation leading to the arrests.
The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.